Economics Quiz 7

If government spending exceeds tax collections,

there is a budget deficit.

Unions might increase efficiency in the case where they

offset the market power of a large firm in a "company town".

If Americans become less concerned with the future and save less at each real interest rate,

real interest rates rise, and investment falls.

Which of the following is an example of a reason why firms might pay efficiency wages?

All of the above are true.

The unemployment rate is

5.8%

The labor-force participation rate is

70.2%

Which of the following sets of government policies is the most growth oriented?

Lower taxes on the returns to saving, provide investment tax credits and lower the deficit.

Which of the following government policies would fall to lower the unemployment rate?

Raise the minimum wage.

A financial intermediary is a middle-person between

borrowers and lenders.

A minimum-wage law tends to

create more unemployment in low-skill job markets than in high-skill job markets.

If GDP=$1000, consumption=$600, taxes=$100, and government purchases=$200, how much is saving and investment?

saving=$200, investment=$200.